OECD Agriculture Support Slipped to 18.2% of Farm Income in 2013

Sep 04, 2014 5:00 am ET

Sept. 4 (Bloomberg) -- OECD countries provided less aid to agriculture last year, with support for farmers making up 18.2 percent of gross farm receipts from 18.8 percent in 2012, the Organization for Economic Cooperation and Development said.

Producer support in the organization’s member states slipped to $258 billion from $266.4 billion, the Paris-based group wrote in a report today.

The world food price index tracked by the United Nations’ Food & Agriculture Organization fell to an average 209.8 last year from 213.3 points in 2012 and a record 229.9 in 2011, still more than double the level a decade ago. As agricultural- commodity prices climbed in the past decade, OECD countries have cut their financial support for farmers.

“Each at their own pace, the OECD member countries are turning away from support measures that lift domestic prices,” the group wrote. “Other mechanisms are gradually being adopted to support farmers, such as payments based on fixed criteria, which don’t directly influence immediate production decisions.”

The level of producer support in OECD countries has dropped from 37 percent of gross farm receipts in the 1986-88 period and 29.7 percent percent in 1995-97, the report showed.

In the European Union, producer support rose to an estimated 87.6 billion euros ($115 billion) last year from 86.3 billion euros in 2012, climbing to 19.8 percent of farmers’ gross receipts from 19.6 percent, according to the OECD.

U.S. producer support fell to $31 billion from $33.5 billion, slipping to 7.4 percent of gross receipts from 7.9 percent, the OECD reported.

Producer support is disparate across OECD members, accounting for 55.6 percent of gross farm receipts in Japan and 0.5 percent in New Zealand. Switzerland cut support for farmers to 49.4 percent of gross receipts from 56.2 percent in 2012, while in Norway the share was reduced to 52.9 percent from 60.2 percent, the OECD estimates.